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Thursday, December 26, 2013

E-commerce websites in India are required to comply
with many
laws in India. However, most of the e-commerce websites
are simply opened with great disregard to the Indian laws. As a
result sooner or later they find themselves on the wrong side of the
law. E-commerce websites frauds,
crimes and offences have significantly increased in India
and there is an urgent need to regulate
them.

One such area that is grossly unregulated pertains
to dealings in Bitcoins in India. Although it being too risky to deal
in Bitcoins in India without complying with Indian laws yet many
people and websites kept on dealing in the same. But the Reserve Bank
of India (RBI) and Indian government were slow
in reacting to the issue. Meanwhile, Bitcoins
frauds and crimes were increasing world over, including
in India.

Many people and companies were dealing in Bitcoins
in India with great disregard to the cyber
law due diligence requirements and in active violation of
the Internet
intermediary liability rules framed under the Information
Technology Act, 2000. The money laundering and foreign exchange laws
of India were also not analysed before opening such Bitcoins
websites.

In the first possible prosecution of
individuals/company engaged in dealing in Bitcoins, searches
were conducted on Seven Digital Cash LLP which owns a
Bitcoin website – www.buysellbitco.in based in Ahmedabad. “We
have conducted searches at 2-3 locations of Seven Digital Cash LLP
and its website. The company was involved in buying and selling of
Bitcoins in India, operating from Ahmedabad,” an ED official
confirmed. The website www.buysellbitco.in has stopped operating
online soon after the searches.

Although the website has stopped operating after the
search, this would not absolve the people behind he website from
civil and criminal liabilities for violation of any Indian law. This
incidence is also an eye opener for other Bitcoins websites operating
in India to fall in line with Indian laws. Otherwise, they may be
prosecuted in the near future.